The Impact of Training on Productivity and Wages: Firm-Level Evidence

Jozef Konings and Stijn Vanormelingen

The Review of Economics and Statistics, 2015, vol. 97, issue 2, 485-497

Abstract: This paper uses firm-level panel data of on-the-job training to estimate its impact on productivity and wages. To this end, we apply and extend the control function approach for estimating production functions, which allows us to correct for the endogeneity of input factors and training. We find that the productivity premium of a trained worker is substantially higher compared to the wage premium. Our results are consistent with recent theories that explain work-related training by imperfect competition in the labor market. © 2015 The President and Fellows of Harvard College and the Massachusetts Institute of Technology

Keywords: productivity; wages; firm-level; on-the-job; control function; production functions; endogeneity; productivity premium; wage premium; labor market (search for similar items in EconPapers)
JEL-codes: J01 J30 J39 J50 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (136)

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Working Paper: The Impact of Training on Productivity and Wages: Firm Level Evidence (2010)
Working Paper: The Impact of Training on Productivity and Wages: Firm Level Evidence (2009)
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